Cambodia’s Economy is improving: PM Hun Sen


February 13, 2019

Cambodia’s Economy is improving: PM Hun Sen

by Taing Vida / Khmer Times Share:
 

Prime Minister Hun Sen today reiterated that he will not use the country’s independence and sovereignty to exchange with trade, noting the economy is improving.

Mr Hun Sen posted message on his Facebook, saying that the Kingdom’s current political, social, and economic situation has been improving, noting that tax revenue is gradually increasing.

“Cambodia cannot depend on only foreign support and the country must not use its independence and sovereignty to exchange for anything,” he said, “However, we want to be good friends with partner countries which want to see Cambodia grow without any interference in its internal affairs.”

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“Cambodia’s economy, which was previously hit by sanctions and pressure, is now growing and becomes stronger,” he said, “[I] thank business people, traders and investors for fulfilling their tax obligations and expanding trade and investment in the country.”

PM Hun Sen noted the Kingdom once was a poor country and gradually gained an economic growth by about 7 percent.

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He said that Cambodia will become an average income country by 2030 and high income by 2050 thanks to higher tax revenues.

Mr Hun Sen’s comment came after the European Union on Monday started the process of intense monitoring and engagement for six months that could lead to the suspension of Cambodia’s preferential access to the market under the Everything-but-arms (EBA) scheme due to perceived setbacks to democracy and human rights.

The EU market accounted for 40 percent of Cambodia’s exports, rising 227 percent between 2011 and 2016, and reaching $5.77 billion in value in 2017 alone.

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The US embassy in Cambodia today issued a press statement, voicing its concerns about violation of human rights and labour rights in Cambodia over the past 18 months.

“We share the EU’s concerns about serious violations of freedom of expression, internationally recognized labor rights, and freedom of association,” the statement said, “The United States calls on Cambodian leaders to restore a true, multi-party democracy, as enshrined in Cambodia’s constitution.”

https://www.khmertimeskh.com/577213/kingdoms-economy-is-improving-pm/

Theresa May’s Government Lives on—and So Does the Brexit Chaos


January 18,2019

Theresa May’s Government Lives on—and So Does the Brexit Chaos

If insanity is doing the same thing over and over again and expecting a different result, the British Prime Minister, Theresa May, and the other members of the government should be confined to a psychiatric hospital. Having narrowly survived a no-confidence vote in the House of Commons on Wednesday, in which a loss would almost certainly have led to a general election, May and her colleagues are now looking to resurrect her Brexit plan, or a slightly refined version of it, which was subjected to an overwhelming defeat in the Commons on Tuesday evening.

With just ten weeks until March 29th, when Britain is supposed to leave the European Union, May is hoping that the prospect of the country crashing out without any withdrawal agreement—an outcome that could cause shortages of essential medicines and industrial parts, as well as bedlam at the Channel ports—will persuade a majority of parliamentarians to back her plan as the least bad option available. Of course, this is precisely the same logic that the Prime Minister was relying on when she delayed a vote on the Brexit plan until Monday, after the New Year, and she ended up suffering what was widely described as the biggest loss ever inflicted on a sitting British Prime Minister. But, after what she has been through in the past couple of years, May can perhaps be forgiven for getting a little addled. The entire country is a little addled. More than a little.

In making the closing argument for the motion of no confidence during Wednesday’s debate, Tom Watson, the deputy leader of the Labour Party, was careful to acknowledge the efforts that May had already made to solve the political equivalent of Goldbach’s conjecture. “I think the country recognizes that effort,” Watson told the packed chamber. “In fact, the country feels genuinely sorry for the Prime Minister. I feel sorry for the Prime Minister. But she cannot confuse pity for political legitimacy, sympathy for sustainable support.” May’s strategy had failed utterly, Watson said, and “the cruellest truth of all is that she doesn’t possess the necessary political skills, empathy, ability, and most crucially the policy, to lead this country any longer.” The question facing the House, Watson said, was whether it is “worth giving this failed Prime Minister another chance to go back pleading to Brussels, another opportunity to humiliate the United Kingdom, another chance to waste a few weeks. The answer must be a resounding no.”

Making the closing argument for the government, Michael Gove, the minister for the environment, sought to divert attention from the humiliating setback that May had suffered, and the fact that more than a hundred Conservative M.P.s had rejected her plan. He turned his invective to Watson’s boss, Jeremy Corbyn, the leftist leader of the Labour Party, whom the Tories still view as their trump card. After noting that Watson hadn’t mentioned Corbyn during his speech, Gove, who is known at Westminster as a clever and slippery fellow, gleefully caricatured many of the Labour leader’s positions, claiming that Corbyn rejects Britain’s role in NATO and wants to get rid of the country’s nuclear deterrent. (A longtime antiwar activist, Corbyn has held these positions in the past, but official Labour policy, which Corbyn now supports, rejects them.) “No way can this country ever allow that man to be our Prime Minister,” Gove said, to loud cheers from the Conservative benches.

Since ten M.P.s from Northern Ireland’s Democratic Unionist Party, which holds the balance of power in a narrowly divided Commons, had agreed to support the government, Gove knew that he and the Conservative government were on safe ground. But although the subsequent vote—of three hundred and twenty-five votes to three hundred and six—assured May’s survival, it merely confirmed the Brexit stalemate. A bit later in the evening, the Prime Minister emerged from 10 Downing Street to say that she had invited M.P.s from all parties to meet with her in an effort to find a way forward. Corbyn quickly rejected the offer, saying that the Labour Party wouldn’t join the talks unless May explicitly ruled out a no-deal Brexit—an option favored by some right-wing Conservative M.P.s.

So the show goes on, a very dark comedy. The hardline Conservative Brexiteers, led by the faux aristocrat Jacob Rees-Mogg, are encouraged because they have defeated May’s plan, and they know the default position is that Britain will crash out on March 29th.

Like a First World War general, May is soldiering ahead. Corbyn, relieved for now of the alarming prospect of having to step into May’s shoes, still says that he wants to honor the result of the referendum—in which many working-class, Labour-supporting areas voted Leave—but also to negotiate a better exit deal. (How he’d manage this, he hasn’t said.) But many Labour Party members—a large majority of them, according to recent polls—want to stay in the E.U., and seventy-one Labour M.P.s have now expressed support for the People’s Vote campaign, which is advocating a second referendum. In the coming days, Corbyn will face strong pressure to clarify his position and commit to another referendum.

 

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How and when will it all end? On Thursday, the government announced that Parliament would debate and vote on May’s “Plan B” on Tuesday, January 29th. M.P.s who spoke with the Prime Minister said that she still thinks she can tweak her deal and win, but few people outside of Downing Street believe it. The E.U. has ruled out making any more significant concessions. Both major parties are horribly split. And when the pollsters present the British public with the three options on offer—a no-deal Brexit, a Brexit on May’sterms, or a decision to Remain—there is no clear majority for any of them.

“I cannot recall Britain falling so low,” Philip Stephens, a veteran political commentator for the Financial Times, wrote in Thursday’s paper. “The Suez debacle in 1956? As supplicant at the door of the IMF 20 years later? These were moments of national shame. They were moments also that passed. The impact of Brexit has been cumulative. Each chapter in the story heaps on more humiliation. However it ends, the damage will not be quickly undone.”

And who, ultimately, is to blame? Before the vote on Wednesday, a BBC News crew approached David Cameron, the former Conservative Prime Minister who decided to hold the 2016 Brexit referendum, near his home in West London. He said that he didn’t regret that decision, even though the result went against his wishes. (He was a Remainer.) Then he set off on his morning jog.

A previous version of this post misstated the day that the vote on Theresa May’s Brexit plan took place.

https://www.newyorker.com/news

Trump vs. the Economy


 

Trump vs. the Economy

December 30, 2018  by

https://www.project-syndicate.org/commentary/trump-behavior-causes-stock-market-drop-by-nouriel-roubini-2018-12

Between publicly chastising US Federal Reserve Chair Jerome Powell and escalating his trade war with China, US President Donald Trump has finally rattled the markets. While investors were happy to look the other way during the first half of Trump’s term, the dangerous spectacle unfolding in the White House can no longer be ignored.

NEW YORK – Financial markets have finally awoken to the fact that Donald Trump is US president. Given that the world has endured two years of reckless tweets and public statements by the world’s most powerful man, the obvious question is, What took so long?

For one thing, until now, investors had bought into the argument that Trump is all bark and no bite. They were willing to give him the benefit of the doubt as long as he pursued tax cuts, deregulation, and other policies beneficial to the corporate sector and shareholders. And many trusted that, at the end of the day, the “adults in the room” would restrain Trump and ensure that the administration’s policies didn’t jump the guardrails of orthodoxy.

These assumptions were more or less vindicated during Trump’s first year in office, when economic growth and an expected increase in corporate profits – owing to forthcoming tax cuts and deregulation – resulted in strong stock-market performance. In 2017, US stock indices rose more than 20%.

But things changed radically in 2018, and especially in the last few months. Despite corporate earnings growing by over 20% (thanks to the tax cuts), US equity markets moved sideways for most of the year, and have now taken a sharp turn south. At this point, broad indices are in correction territory (meaning a 10% drop from the recent peak), and indices of tech stocks, such as the Nasdaq, are in bear-market territory (a drop of 20% or more).

Though financial markets’ higher volatility reflects concerns about China, Italy and other eurozone economies, and key emerging economies, most of the recent turmoil is due to Trump. The year started with the enactment of a reckless tax cut that pushed up long-term interest rates and created a sugar high in an economy already close to full employment. As early as February, growing concerns about inflation rising above the US Federal Reserve’s 2% target led to the year’s first risk-off.

Then came Trump’s trade wars with China and other key US trade partners. Market worries about the administration’s protectionist policies have waxed and waned throughout the year, but they are now reaching a new peak. The latest US actions against China seem to augur a broader trade, economic, and geopolitical cold war.

An additional worry is that Trump’s other policies will have stagflationary effects (reduced growth alongside higher inflation). After all, Trump is planning to limit inward foreign direct investment, and has already implemented broad restrictions on immigration, which will reduce labor-supply growth at a time when workforce aging and skills mismatches are already a growing problem.

Moreover, the administration has yet to propose an infrastructure plan to spur private-sector productivity or hasten the transition to a green economy. And on Twitter and elsewhere, Trump has continued to bash corporations for their hiring, production, investment, and pricing practices, singling out tech firms just when they are already facing a wider backlash and increased competition from their Chinese counterparts.

Emerging markets have also been shaken by US policies. Fiscal stimulus and monetary-policy tightening have pushed up short- and long-term interest rates and strengthened the US dollar. As a result, emerging economies have experienced capital flight and rising dollar-denominated debt. Those that rely heavily on exports have suffered the effects of lower commodity prices, and all that trade even indirectly with China have felt the effects of the trade war.

Even Trump’s oil policies have created volatility. After the resumption of US sanctions against Iran pushed up oil prices, the administration’s efforts to carve out exemptions and bully Saudi Arabia into increasing its own production led to a sharp price drop. Though US consumers benefit from lower oil prices, US energy firms’ stock prices do not. Besides, excessive oil-price volatility is bad for producers and consumers alike, because it hinders sensible investment and consumption decisions.

Making matters worse, it is now clear that the benefits of last year’s tax cuts have accrued almost entirely to the corporate sector, rather than to households in the form of higher real (inflation-adjusted) wages. That means household consumption could soon slow down, further undercutting the economy.

More than anything else, though, the sharp fall in US and global equities during the last quarter is a response to Trump’s own utterances and actions. Even worse than the heightened risk of a full-scale trade war with China (despite the recent “” agreed with Chinese President Xi Jinping) are Trump’s public attacks on the Fed, which began as early as the spring of 2018, when the US economy was growing at more than 4%.

Given these earlier attacks, markets were spooked this month when the Fed correctly decided to hike interest rates while also signaling a more gradual pace of rate increases in 2019. Most likely, the Fed’s relative hawkishness is a reaction to Trump’s threats against it. In the face of hostile presidential tweets, Fed Chair Jerome Powell needed to signal that the central bank remains politically independent.

But then came Trump’s decision to shut down large segments of the federal government over Congress’s refusal to fund his useless Mexican border wall. That sent markets into a near-panic, and the government shutdown was soon followed by reports that Trump wants to fire Powell – a move that could turn a correction into a crash. Just before the Christmas holiday, US Treasury secretary Steven Mnuchin was forced to issue a public statement to placate the markets. He announced that Trump was not planning to fire Powell after all, and that US banks’ finances are sound, effectively highlighting the question of whether they really are.

Recent changes within the administration that do not necessarily affect economic policy making are also rattling the markets. The impending departure of White House Chief of Staff John Kelly and Secretary of Defense James Mattis will leave the room devoid of adults. The coterie of economic nationalists and foreign-policy hawks who remain will cater to Trump’s every whim.

As matters stand, the risk of a full-scale geopolitical conflagration with China cannot be ruled out. A new cold war would effectively lead to de-globalization, disrupting supply chains everywhere, but particularly in the tech sector, as the recent ZTE and Huawei cases signal. At the same time, Trump seems to be hell-bent on undermining the cohesion of the European Union and NATO at a time when Europe is economically and politically fragile. And Special Counsel Robert Mueller’s investigation into Trump’s 2016 election campaign’s ties to Russia hangs like a Sword of Damocles over his presidency.

Trump is now the Dr. Strangelove of financial markets. Like the paranoid madman in Stanley Kubrick’s classic film, he is flirting with mutually assured economic destruction. Now that markets see the danger, the risk of a financial crisis and global recession has grown.

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House’s Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

 

 

The Sum of All Brexit Fears


December 29, 2018

The Sum of All Brexit Fears

The Leavers lied: The costs of withdrawing from the European Union were always destined to outweigh the benefits. Alas, the responsible, imaginative, and inclusive political leadership needed to minimize the damage is nowhere in sight.

 

LONDON – Day after day, week after week, most British citizens think that the turmoil over their country’s proposed exit from the European Union cannot get any worse. But, without fail, it does. Turmoil turns into humiliating chaos; a political crisis threatens to become a constitutional crisis.

Meanwhile, the date of the United Kingdom’s departure from the EU gets closer. It is fewer than 100 days until the UK leaves, and at the moment there is no deal in sight that is acceptable to both Parliament in Westminster and the European Commission and European Council in Brussels.

The problem began with the 2016 referendum vote to leave. Unfortunately, despite plotting and planning for this outcome for years, Leavers had no idea what quitting the EU would actually entail. Their campaign was rife with delusions and dishonesty. Leaving, they said, would mean a financial bonanza, which the UK would inject into its National Health Service. Negotiating a trade deal with the EU after departure would be easy. Other countries around the world would queue up to make deals with Britain. All lies.

The Brexit talks themselves, when they finally began, were hampered by the incompetence of the ministers put in charge. The UK’s negotiators were long on ideological certainty and short on workable solutions.

Moreover, the red lines that Prime Minister Theresa May laid down at the very beginning made their work more difficult. We must not only leave the EU, she argued, but also the single market and the customs union. We could not accept any jurisdiction by the European Court of Justice. We must be able to end the freedom of European citizens to come to the UK to staff our hospitals, pick our crops, fill gaps in our professional services, and increase our prosperity.

One of the central problems to emerge from this mish-mash of nonsense was how to avoid re-establishing a hard border between Northern Ireland and the Republic of Ireland if the UK stayed within May’s red lines. Such a border would (as the head of Northern Ireland police noted) jeopardize the 1998 Good Friday Agreement, which brought peace to Northern Ireland after three decades of violence.

Recent negotiations have stalled on this point, because a successful outcome must square a circle. Britain has already accepted that Northern Ireland will have to stay in the customs union until the UK has concluded a long-term trade deal with the EU. Until then, there will have to be an insurance policy – a “backstop” – against possible failure. But hard-liners within May’s Conservative Party, and Democratic Unionist MPs from Northern Ireland, on whom May depends for her parliamentary majority, will accept only a backstop with a time limit, which is no real “stop” at all.

At the root of May’s difficulties is a simple truth that she and others are unwilling to accept. It is well-nigh impossible to negotiate an exit deal that is both in the national interest and acceptable to the right-wing English nationalists in her party. This became crystal clear during a grim week for the government earlier this month.

After May and her advisers concluded that the exit deal she had negotiated with the EU would be defeated in Parliament by a large majority, they suspended the debate before voting took place. May then announced that she was going to talk to other EU presidents and prime ministers to get the sort of reassurances that might satisfy her right-wing critics.

Those critics have operated increasingly like a party within a party. Halfway through May’s frantic diplomatic safari, they announced that they had gathered enough support to trigger a vote of no confidence in her leadership of the Conservative Party. She won the vote with about two-thirds support, but with her authority badly dented.

Capping an awful week, European ministers made clear that they were not prepared to reopen the agreement with Britain to renegotiation. They could offer “best endeavours” and “good will,” but no more.

So what happens next? May’s supporters think she is determined; others reckon she is simply obstinate and blind to reason. She has continued to put off any debate on her own proposals. Critics say she is trying to push any vote as close to the exit date as possible, in order to pressure MPs to support her plan. “Back my plan or face the disaster of no deal,” she seems to be saying. “Support me or we’ll jump off the cliff.”

But pressure is building for Parliament to take control of the process and work through a more acceptable range of options. Is there a majority in favor of May’s deal? Is Parliament totally opposed to crashing out of Europe with no deal? Should we seek a Norway-style relationship with Europe and aim to stay in both the single market and the customs union, at the cost of continuing to accept free movement of workers? Should we try to postpone the date of our EU departure until we have sorted out what exactly we want? Should there be another referendum, passing the final decision back to the people?

A fog of political uncertainty hangs over Britain after Christmas. Only four things seem clear. First, the Conservative Party will have growing difficulty accommodating its fanatical English nationalist wing. Second, to save the UK from disaster, Parliament will have to get a grip on the process. Third, life outside the EU will, in any case, leave Britain poorer and less influential in the world. And, lastly, whatever the outcome, Brexit will be a divisive issue for years to come.

The Brexiteers lied. The costs of leaving the EU were always destined to outweigh the benefits. Alas, the responsible, imaginative, and inclusive political leadership needed to minimize the damage is nowhere in sight.

Chris Patten, the last British governor of Hong Kong and a former EU commissioner for external affairs, is Chancellor of the University of Oxford.

Are we at ‘peak America’?


December 5,2018

Are we at ‘peak America’?

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2018/11/29/are-we-at-peak-america

The Group of 20 summit in Argentina is taking place at a moment when the United States still stands at the center of the world. The U.S. economy is booming, the dollar is almighty, American technology companies continue to dominate the new digital economy, and the U.S. military remains the unrivaled master of land, sky and sea. But there are forces, both short-term and long-term, that are working to erode this hegemony.

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As Morgan Stanley’s Ruchir Sharma has pointed out, the global economy looks as if it’s at “peak America.” U.S. stocks have outperformed the rest of the world this decade, and that sort of trend rarely lasts. The current recovery is now the second-longest in history, and it is due for a downturn. Interest rates are rising, corporate profit growth is slowing, and budget deficits are surging. Even President Trump seems aware of the likelihood of a dip, which is why he has been preparing the ground for it, blaming the Federal Reserve for raising interest rates.

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But there are broader structural realities at work as well. While the United States continues to outperform other advanced economies, the “rise of the rest” also continues, with China, the world’s second-largest economy, growing at three times the pace of the United States. A quarter-century ago, China accounted for less than 2 percent of the global economy. Today, it is 15 percent and rising. China boasts nine of the world’s 20 most valuable tech companies.

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This economic reality is having a geopolitical effect. China is the largest trading partner of major economies in Latin America, Africa and Asia. That gives it clout. Its “Belt and Road Initiative” is designed to extend Beijing’s influence across Asia and beyond, creating not just a market but also a string of allies and dependencies. It has expanded its control over the South China Sea in ways that neither the Obama administration nor the Trump administration has been able to block or counter.

Anywhere one goes in the world these days, leaders talk about the United States’ retreat from the world stage. They note that it began before Trump. Most date it to the aftermath of the Iraq War, spanning the administrations of George W. Bush, Barack Obama and now Trump. And while the Trump administration is bellicose in its policies, especially on trade, they are all in service of a Fortress America mentality that seeks less engagement with the world, politically and economically.

Foreign leaders also note that the United States is likely to be increasingly constrained by its mounting budget woes. The Financial Times’s Gillian Tett points out that the U.S. government now spends $1.4 billion a day on its debt, 10 times more than the next major industrialized country does. As interest rates rise and more Americans reach the age of collecting Social Security and Medicare, the federal government will be unable to fund much else. Ezra Klein has quipped that the American government is “an insurance conglomerate protected by a large, standing army,” and that is becoming truer every day.

American retreat will not produce a better world. It will be messier and uglier. To get a glimpse of it, look at the Middle East today. As the United States has withdrawn from its traditional role as the region’s power-broker — maintaining relations with all sides and striving to achieve some degree of stability — Iran, Turkey and Saudi Arabia are all jockeying for influence. The United States has simply subcontracted its policy to Riyadh, encouraging the Saudis’ reckless behavior and resulting in the world’s gravest humanitarian crisis, the war in Yemen, where 12 million people are on the verge of famine.

At a time when these forces of entropy are intensifying, when the United States does face real constraints on what it can do internationally, the wisest strategy would be to bolster the international institutions and norms that the United States built after World War II, both to maintain some degree of stability and order and to preserve and extend American interests and values. The smartest path to constraining China comes not from a head-on policy of containment but rather from a subtle one that forces Beijing to remain enmeshed and interdependent with the international community. China recognizes this and tries hard to free itself from multilateral groups, preferring to deal one-on-one with countries where it will always tower over its negotiating partner.

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And yet, nothing animates the Trump administration more than its opposition to multilateralism of any kind. And so, as the world gets more chaotic, the forces that could provide order are being eroded. And as is so often the case, China simply watches quietly and pockets the gains.

(c) 2018, Washington Post Writers Group

Washington  Post

 

“Decoupling the US from Asia”


My Friends,
I am baffled why my good friend Larry Moy’s commentary titled “Decoupling the US from Asia” has been blocked.  I find nothing nothing wrong with it.  I am  now posting it, as an act of defiance as I resent anyone who attempts to deny me of my right promote freedom of  expression. Let me find out find out the problem, fix it and come back to you, Larry.—Din Merican

“Decoupling the US from Asia”

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<
<I’ve tried to post this in your blog column “Decoupling the US from Asia”. Looks like I’m completely blocked from your blog. Good living and good luck, my friend. It has been a great pleasure knowing you. If you would like to do one last of my post to your blogt the recent summits of the ASEAN and APEC forum, Mike Pence played the role of “teleprompter Trump”, gave up America’s Asia game plan for 2019. And it won’t be pretty for policymakers, markets or investors in the most dynamic Asia-Pacific economic region. Expect Trump to double down on the trade war with China.

There will be NO BREAKTHROUGH with the Trump-Xi meeting in Argentina at the end of this month, if there would be a meeting at all. For the “trade war” is not about trade. Trump wants a total submission of China. He wants total dominance over China. He wants China to be an obedient lapdog.

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N

o one with any understanding of trade will believe that the $505 billion of goods China sent to the US in 2017 means Beijing ripped off American workers by that same amount. Pence’s October 4 “we-will-not-stand-down” China speech suggested 2019 could get even worse for Beijing and Asia. His November 17 comments – “The US will not change course until China changes its ways” – came with fresh warnings of new taxes on Chinese goods. In other words, “we want your total surrender first” . Pence’s assurance that “we’re here to stay” could mean a brutal 2019 for Asian stocks, export growth and epic volatility in currency markets.

Trump’s biggest misstep was believing Xi Jinping, a nationalist strongman, would buckle. The delusional idiot didn’t realize that the current group of Chinese leaders were all Red Guards during the Cultural Revolution era, toughened with nationalism. Just as Trump maintaining his deplorable base requires him looking resolute, Xi’s legitimacy in Communist Party circles relies on projecting Chinese strength. The Chinese leaders have decided to dig in for a protracted trade war, determined to go back to the poor days, rather than surrender to Trump.

 

Bowing to the hate-tweeter-in-chief isn’t an option for a Chinese president aiming to be in office long after the Trump era. China is prepared to go down in ruin with the US (兩敗俱傷). Xi believes that time is on his side. He doesn’t have to stand for reelection. He can wait out Trump.Trump may be thinking he is winning the “trade war” so far, but he is not. Besides tariffs on Chinese goods, which is actually taxes on American businesses, what other major weapons does he has?

So far, Xi’s team has pulled punches in its responses but the retaliations were pretty restrained. And Beijing has a rich selection of weapons, such as start dumping its $1.3 trillion of Treasury debt holdings, slamming the dollar and sending US interest rates skyrocketing. Sure, it would be a Pyrrhic victory. Any step that reduces the spending power of US consumers is bad for China’s ability to grow at 6.5%, but it would surely get Trump’s attention.

 

China could also impose exit taxes on US goods; make it harder for Chinese tourists to visit America and slow the flow of students dropping hundreds of thousands of dollars a year at US universities. China could clamp down on work visas for American executives and corporate licenses; doing surprise tax audits, inspections of US airlines, hotels, restaurants and adding new logistics bottlenecks that halt the flow of vital supplies; Trademarks could be revoked, or new taxes imposed. Capital controls could be imposed to impede the operations of US investment banks on the mainland. China could restrict export of rare-earth to completely disrupt the high tech industry in the US.. .But China has not done any of these. As Xi put it on November 17, “confrontation, whether in the form of a hot war, cold war or trade war, will produce no winners.”

Singapore’s Prime Minister Lee Hsien Loong asked the question on the mind of every Asian leader at last week’s ASEAN summit: What to do when they’re forced to choose between Trump’s America and Xi’s China? I believe this is a when and not an if question, and 2019 is the year decisions are due. Good luck with any balancing act.